Fannie Mae Clarifies that Principal Reduction Amount Initiatives will not apply to MBS

On August 2, 2010, the United States Department of the Treasury released Supplemental Directive 10-07, Making Home Affordable - Interactions with HFA Hardest-Hit Fund Programs, which clarifies servicer roles and responsibilities under state Housing Finance Agencies' Hardest-Hit Fund Programs (HHFs) for unemployed and delinquent borrowers. One option under that Supplemental Directive, which requires applicable borrowers to be evaluated for principal reductions on their mortgage loans, will not apply to mortgage loans which are backing Fannie Mae single-family mortgage-backed securities (MBS).